On Nov 30, 2015, shares of Aspen Insurance Holdings Ltd. AHL hit a 52-week high of $51.13 driven by better-than-expected third-quarter 2015 results and an outlook upgrade. With about 0.3 million shares exchanged in the last trading session, the stock finally closed the session at $50.52. Year to date, the stock has returned 15.41% comparing favorably with 1.04% gains by the S&P 500.
Aspen Insurance’s operating earnings of 93 cents per share in the third quarter surpassed the Zacks Consensus Estimate by 1.09%. With respect to the surprise trend, the Zacks Rank #3 (Hold) property and casualty insurer delivered positive surprises in two of the last four quarters.
Better performance by both Insurance and Reinsurance segments led to a 5% improvement in net earned premiums in the quarter. The company noted that its U.S. Insurance platform is on track to exceed $600 million of net earned premiums in 2015.
The third quarter marked the Insurance segment delivering record insurance underwriting income with combined ratio improving 840 basis points year over year.
Riding on the strength of continued efficiency gains and benefit of scale in the U.S. platform, expense ratio improved 60 basis points in the reported quarter.
Backed by strong operational performances, the company has also strengthened its balance sheet position. While cash and cash equivalents improved 1.5% over the 2014 end level, the debt level remained flat. Book value per share improved 0.3% to $46.30 at Sep 30, 2015. A strong capital position enabled to company to buy back $84 million worth of shares through the first nine months with $416 million worth remaining under authorization. The company also expects to generate return on equity of 11% in 2015.
Additionally, A.M. Best upgraded the rating outlook to positive for the issuer credit ratings or ICR of Aspen Insurance and its subsidiaries. The upgrade was backed by sustained solid financial strength, improving operating performance and a sturdy business profile.
These positives drove the Zacks Consensus Estimate higher on upward revisions in the last 30 days. The Zacks Consensus Estimate increased 1% to $4.58 for 2015 and 4.2% to $4.48 for 2016.
Stocks to Consider
Some better-ranked property and casualty insurers are Cincinnati Financial Corp. CINF, RLI Corp. RLI and Hallmark Financial Services Inc. HALL. Each of these stocks sports a Zacks Rank #1 (Strong Buy).
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